We are now five years into the passage of the heralded stimulus bill that was supposed to end all our economic woes. Is it time to celebrate yet?
This whole “have-the-government-spend-more-money-and-prosperity-will-result” approach is nothing more than resurrected Keynesian theory. John Maynard Keynes was the economist who became the darling of those who sought to prime the pump of the economy by government expenditure. Richard Nixon, who at one point decided to impose wage-and-price controls on the private sector to resuscitate the economy, remarked that even he had become a Keynesian in economics. It was all the rage at one time.
Barack Obama has done his best to make it popular once again. Yet there is one important economics lesson he has missed: government can only spend what it takes away from those in the private sector, and when it does that, there is less to go around in that sector, thereby hurting the economy in the long run. Yes, some government jobs may be created via a stimulus, but they will be temporary and will contribute next to nothing to economic vitality.
Even though the unemployment figure has seemed to come down, it masks a terrible reality: we have seen the number of people in the job market drop precipitously; people are giving up on finding work and becoming more dependent on government for sustenance than ever before. One must ask, though, if that isn’t the goal of this administration anyway—after all, the Obama philosophy is the exaltation of the welfare state.
So, welcome to the anniversary, but you might have to remind people what we are celebrating.
And what has been the overall effect of this spending spree for the long term?
And what about the promises of what Obamacare would do for us all?
I can imagine a scenario where the CBO itself may come under scrutiny:
Don’t laugh. Under this administration, anything is possible.